China’s Gig Economy Expands as Formal Jobs Dwindle, Raising Welfare Concerns

China’s flexible-employment pool is projected at 320 million this year—44 % of the labour force—up from 280 million in 2025 (China New Employment Forms Research Center). Tens of millions of former full-time staff, including recent graduates, are moving into ride-hailing, food-delivery and other platform work. A property slump, overcapacity and AI-enabled automation have cut construction and factory posts, pushing workers into the platform sector, notes expert Yang Zhang.

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Bao Zhang, 30, left a software-testing job to drive for a ride-hailing app, earning about 6,000 yuan a month after costs and working from 7 a.m. to midnight. Angel An, 24, promotes services to tourists on social media and earns above the driver average. Li, a cleaner in his early 50s, delivers food for an extra 40-100 yuan daily but says rider flood compresses earnings. All cite health risks, lack of insurance, and view pensions as “too far away.”

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Ride-hailing drivers now average 6,000 yuan monthly, with wages down 1.8 % in 2025, while 16 million food-delivery riders saw an 11 % hourly-pay rise to 37.3 yuan. By end-2024, 70.6 million flexible workers were enrolled in the urban pension scheme, yet contributions to medical, unemployment, maternity or housing insurance are unreported. Central transfers to plug social-insurance have trebled, covering about 10 % of spending, and a 2019 report warned the pension fund could run out by 2035.

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Government advisers argue the priority is to bolster the formal services sector rather than tax gig workers. One adviser warned that taxing gig labour “would be highly unreasonable,” and another called for policies that “reduce anxiety” so workers save less and spend more. Central transfers to social-insurance have trebled, covering about 10 % of spending.

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Yang Zhang warns of a “tough trade-off between forcing employers to fund welfare and preserving job creation.” Nomura chief China economist Ting Lu says the “urgent priority” is to include flexible workers in the employee social-security system. A Peking University survey of 30,000 delivery workers found fewer than 10 % would back mandatory contributions, costing about 10 % of income.

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• “Those who used to take taxis now have to drive them themselves,” — Bao Zhang, ride-hailing driver

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• “The proportion is extremely high,” — Yang Zhang, cultural-anthropology expert

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• “I can take control, rather than wait for decades for others to pay me,” — Angel An, gig promoter

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• “A whole new generation is growing up unaccustomed to the security and confidence that their parents for a long time enjoyed,” — Frederic Neumann, HSBC Asia economist

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• “The urgent priority is to make it easier for flexible workers to be included in the employee social security system,” — Ting Lu, Nomura chief China economist

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Four cities, including Shenzhen, warned of ride-hailing saturation, hinting at tighter regulation. Advisers have floated birth-subsidy schemes as a long-term fix, while policymakers debate mandatory social-security coverage for gig workers.

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